[The following information applies to the questions displayed below.) Carolina Corporation, an S corporation, has no corporate E&P from its years as a C corporation. At the end of the year, it distributes a small parcel of land to its sole shareholder, Shadiya. The fair market value of the parcel is $93,800 and its tax basis is $57,000. Shadiya's basis in her stock is $22,500. Assume Carolina Corporation reported $0 taxable income before considering the tax consequences of the distribution. (Leave no answer blank. Enter zero if applicable.)
[The following information applies to the questions displayed below.) Carolina Corporation, an S corporation, has no corporate E&P from its years as a C corporation. At the end of the year, it distributes a small parcel of land to its sole shareholder, Shadiya. The fair market value of the parcel is $93,800 and its tax basis is $57,000. Shadiya's basis in her stock is $22,500. Assume Carolina Corporation reported $0 taxable income before considering the tax consequences of the distribution. (Leave no answer blank. Enter zero if applicable.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
Carolina Corporation, an S corporation, has no corporate E&P from its years as a C corporation. At the end of the year, it
distributes a small parcel of land to its sole shareholder, Shadiya. The fair market value of the parcel is $93,800 and its tax
basis is $57,000. Shadiya's basis in her stock is $22,500. Assume Carolina Corporation reported $0 taxable income
before considering the tax consequences of the distribution. (Leave no answer blank. Enter zero if applicable.)
b. How much gain must Shadiya recognize (if any) as a result of the distribution, what is her basis in her Carolina Corporation stock
after the distribution, and what is her basis in the land?
Gain recognized
Stock basis
Land basis](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a79f5fd-2bdd-484b-9c0d-a83d48b55247%2F0b67a572-da0e-4b61-bb70-831669076446%2Fcj7e4o_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Carolina Corporation, an S corporation, has no corporate E&P from its years as a C corporation. At the end of the year, it
distributes a small parcel of land to its sole shareholder, Shadiya. The fair market value of the parcel is $93,800 and its tax
basis is $57,000. Shadiya's basis in her stock is $22,500. Assume Carolina Corporation reported $0 taxable income
before considering the tax consequences of the distribution. (Leave no answer blank. Enter zero if applicable.)
b. How much gain must Shadiya recognize (if any) as a result of the distribution, what is her basis in her Carolina Corporation stock
after the distribution, and what is her basis in the land?
Gain recognized
Stock basis
Land basis
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